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ECB stops operations with some Greek banks | Reuters

(Reuters) – The European Central Bank has stopped providing liquidity to some Greek banks…

The news sent the euro lower against the dollar, fanning concerns among investors and in Greece that the country may have to leave the euro zone.

The development highlights the weak state of the banking sector in Greece, where Greeks are pulling euros out of the banks in fear that their country may exit the European single currency…

“As recapitalization wasn’t in place, the ECB stopped monetary policy operations,” a euro zone central bank source told Reuters… “They are now in the ELA of the Greek central bank.”

The ECB only conducts its refinancing operations with solvent banks. Banks which fail to meet strict ECB rules but are deemed solvent by the national central bank (NCB) concerned can nonetheless go to their NCB for emergency liquidity assistance (ELA).

via Exclusive: ECB stops operations with some Greek banks | Reuters.

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